Industrial Commission denies flaring exemption

The North Dakota Industrial Commission has turned down an oil company’s request for relief from the state’s natural gas flaring restrictions.

Marathon Oil had asked for the exemptions for a number of wells on or near the Fort Berthold Reservation. State mineral resources director Lynn Helms told the Commission Marathon asked for it due to “operational constraints and system design limitations.”

"The pipes are too small," Helms told the Commission. He recommended the Commission deny the request.

"This is exactly counter to your gas capture policy," Helms said.

Helms said if the Commission would grant the request, it could open the door for additional flaring exemption requests in other areas without adequate pipelines. He said Marathon and One OK – the midstream company that builds pipelines and gas processing plants – have not been able to work out plans for infrastructure upgrades.

"The impact of you forcing your gas capture requirements here will drive that process forward," Helms said. "I believe it will drive the investment necessary to get the larger pipes installed."

Helms also said one barrier to the infrastructure upgrades is the bureaucracy on the reservation to get rights-of-way. He said it’s a process that has a number of steps and takes a long time – and he is meeting with tribal leaders, as well as the federal Department of the Interior to talk about the process, and to see if it could be sped up.

Gov. Doug Burgum, who chairs the Industrial Commission, said he hopes something can be done to cut through what he called the “bureaucratic labyrinth.”

"We have a shared goal," Burgum said.

By November, companies must capture 88 percent of the natural gas, meaning 12 percent could still be flared.

The state Industrial Commission is giving the oil and gas industry another 10 months to meet a goal of capturing 85 percent of the natural gas produced by oil wells.

That means flaring would have to be down to 15 percent.

The original goal was to reach the 85 percent capture by January first. Instead, the new date is November first. The industry had asked for a two year delay. There’s an interim goal of 80 percent on April first. The Commission set an 88 percent goal in 2018 – and at least a 91 percent capture goal in 2020.

Three environmental groups say the state Industrial Commission needs to stick to its policy on reducing the amount of natural gas flaring in the Bakken.

The North Dakota Petroleum Council has asked for a two year delay in meeting the 85 percent gas capture goal set out in Commission policy. The request is based on a slowdown in the industry, and what some operators say are delays in getting their oil wells connected to natural gas gathering systems.